Oman’s energy firm OQ SAOC plans to sell a 49% stake in its pipeline unit in a domestic initial public offering that could be the largest ever recorded in the Gulf country.
OQ will offer the stake in OQ Gas Networks SAOG through Oman Energy Trading Company Limited and Oman Oil Services Limited, according to a statement released on Monday. The share sale could raise up to $800 million, Bloomberg News has reported, making it a candidate for Oman’s biggest ever listing.
Trading in OQGN shares is expected to begin in October.
OQGN will be the second IPO in Oman’s privatization program that aims to boost the state’s coffers and expand its stock market, similar to share listings in Saudi Arabia and the United Arab Emirates United that have raised billions of dollars in the last two years.
OQ floated its oil drilling unit Abraj Energy Services SAOG in March, raising $244 million in what was Oman’s biggest listing in more than a decade. Its shares have risen about 20% since then.
OQ is an integrated energy company with oil and gas exploration, production operations, refineries, a retail network and a large petrochemical business. OQGN has a natural monopoly over essential gas transportation infrastructure in Oman and has approximately 4,031 km (2,505 miles) of pipelines.
OQGN expects to pay dividends semi-annually, with a payment of 33 million rials ($85.7 million) for the first nine months of 2023 in January 2024, and the second distribution of 11 million rials for the final quarter of this year around April 2024. according to the statement.
It made a profit of 33.1 million riyals on 85 million riyals of revenue in the first half of this year, up from 23.4 million riyals in profit for the same period in 2022.
Oman’s wealth fund said last year it was considering the IPO of two OQ units, as well as a manufacturing company, as the sultanate seeks to catch up with the boom in Gulf listings due to rising oil prices and investor inflows. Oman Telecommunications Co SAOG’s $748 million IPO in 2005 is currently the country’s largest, data compiled by Bloomberg show.
Bank Muscat SAOG, Bank of America Corp. and EFG Hermes have been appointed joint global coordinators of the OQGN IPO.
